At Gravie, we offer full-service solutions to keep your business compliant with the Affordable Care Act (ACA). The ACA can be confusing and failing to comply with ever-changing rules and regulations can be time consuming and costly to your business. Gravie works with some of the best benefit lawyers in the country to ensure our customers are compliant with all applicable rules and regulations.
This blog post provides a summary of what employers should keep in mind if they receive an ACA Employer Shared Responsibility Assessment notice from the IRS.
Employers that have been identified as owing an Affordable Care Act (ACA) Employer Shared Responsibility Assessment may be receiving a notice from the IRS in the next few weeks. The IRS has released updates to an FAQ on the topic of employer shared responsibility payments. Questions 55-58 introduce the assessment process for the 2015 tax year that will begin in the remaining months of 2017.
The IRS will send Letter 226J if it determines you owe a penalty payment.
Here are a few things to keep in mind:
- Receiving a notice does not necessarily mean an employer owes a payment. There could be an error in their 1094 or 1095 forms.
- 2015 was a phase-in year for Applicable Large Employer (ALE). In 2015, the mandate required ALEs with 100 or more full-time employees to offer MEC that was both affordable and met minimum value to 70% of their full-time employees.
- The assessment is based on information the employer reported and information provided to the IRA by the state and federal exchanges regarding individuals who received premium tax credits.
- There will be a 30 day period in which to respond to the notice. The response window is measured from the printed date on the Letter.
- The Letter will include the amount of penalty the IRS believes the employer owes and instructions on how to respond both if the employer agrees or disagrees with the assessment.
- The Letter will also include a listing of full-time employees: 1) to whom the employer did not offer minimum essential coverage that was both affordable and met minimum value; and 2) who obtained a premium tax credit.
- Form 14764 will be used to respond to the IRS.
- The IRS will send an acknowledgement letter once they receive an employer’s response. If they revise the payment based on the response, it will be included in this acknowledgement.
- If an employer still disagrees with the proposed payment, they will need to file a written request for an appeal.
We hope this information was helpful! As always, you can count on Gravie to keep you compliant, and also informed.
If you’re an employer interested in getting started with Gravie, contact us today.